The Scale of Apple’s Risk

Known for its iconic products and obsession with detail, this company became the most valuable on the planet.

Apple? No, General Motors decades ago.

Associated Press

Going from top-of-the-heap to zero like GM did is, of course, a rarity, but be forewarned: There are many examples of shares in the world’s largest companies by market capitalization going on to underperform the broad stock market. Whether it was Microsoft in 1999, Cisco Systems in March 2000 or General Electric later that year, reaching the top spot has proved to be something of a curse.

Recently deposed ExxonMobil is one exception, having made it to the top multiple times in a variety of different incarnations.

For most of these companies, the rapid growth, superior products, investor giddiness or sheer luck that got them there succumbed to mean reversion, technological changes and hungrier upstarts putting a target on their backs.

Either Apple really is worth as much as the major listed U.S. phone companies, railroad operators and car makers combined—or history is destined one day to repeat itself.

Comments (5 of 39)

Apple already lost its innovative advantage and started copying MSFT & Google. It's just a matter of time until consumers realize that the premium price for their products isn't worth it and earnings growth will slow down rapidly

10:31 pm February 17, 2012

Anonymous wrote :

No, that's the thing: it is worth all those combined and more. That's not on a speculative basis but a fundamental one: AAPL currently trades at less than a 15x multiple despite growing 100% per year in earnings with $100bn in the bank and clear dominance in its important markets.

The number of currently deployed mobile handsets worldwide exceeds 2bn. If you don't believe every single one of them will be an iPhone or something like it in the next 5 years, bet against AAPL.

9:08 pm February 17, 2012

ccw wrote :

brilliant, substantive, and helpful "article". could be written from a template or journo-bot.

6:36 pm February 17, 2012

ranganoa wrote :

Hey, guess what neither a Roger Smith nor Jon
Corzine at AAPL; no Robert Crandall
either.

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